Harry Dent once said that the Dow would hit 40,000 by 2008 then will fall back down to 10,000 as the boomers liquidate for their retirement.
My anecdotal view of this is that the Generation Xers are already spending their early inheritance so there won’t be an investment boom when the Xers come to their most productive years. Plus the Xers will have to care for aging parents creating friction between the two generations. Boomers will use their money as carrots. The Xers are quite a happy-go-lucky lot so I don’t believe that they have the ambition of their parents. Boomers go for self-esteem and self-realization, whereas Xers are touchy-feely.
In terms of real estate I see a possible decline since people certainly won’t be able to care for the elderly while still have time and money to enjoy that second home they inherit. There’s a good chance, however, that we’ll see a big increase in immigration (which will help real estate) because we’ll need to import service workers to care for the elderly boomers and to help out the more indolent Xers. In this global world, the health of foreign economies will affect our asset prices (at least in the glamour cities).
The Gen Ys won’t have many children. They are more tech savvy and will lead the urban core renewal. They’ll want to live closer to the city so they can hang out with their friends. Gen Ys are likely to buy homes and share with friends and roommates. I see a coming rift between the globalized population of the large cities and the population of the traditional red-states.
I’m 38 and, yes, I feel like a contrarian stuck between generations. It doesn’t help that I’m the youngest of all my cousins and that many of my friends are younger than me. Depending on the situation, sometimes I feel 50yo and at other times, I feel 25yo.
